Tesla announced today that the new Model 3 Long Range All-Wheel-Drive variant is now eligible for full federal tax credits of up to $7,500 in the United States.
Price changes
Tesla’s official X page for North America made the announcement on June 18, indicating that the model now starts at only $34,990 if we deduct the $5,000 estimated 5-year gas savings and the $7,500 federal tax credits.
Without the estimated 5-year gas savings, the Tesla Model 3 LR AWD costs $39,990.
As indicated in the online configurator, the Tesla Model 3 LR AWD variant costs $47,490 before any of the abovementioned incentives.
On the other hand, the non-eligible RWD variant costs $33,990, while the eligible top-tier Performance variant starts at $42,490.
New Point of Sale system
The US government launched a new point-of-sale system for electric vehicle federal tax credits in October last year.
In the past, buying a qualifying electric vehicle meant waiting until tax season to claim the credit. The incentive lowers the EV buyers’ tax bill for the previous year.
However, it appeared to be an inefficient method of releasing the credit to eligible buyers. In response, the IRS and the DOT decided to develop a new system that immediately deducts the tax credit from the price of the vehicle upon purchase.
“For the first time, the IRA allows consumers to reduce the up-front cost of a clean vehicle, expanding consumer choices and helping car dealers expand their businesses. The IRS has focused on streamlining this process for car dealers as part of its commitment to improving service and helping taxpayers claim the credits they are eligible for.”
Laurel Blatchford, Chief Implementation Officer for the Inflation Reduction Act
Tesla welcomed the new system in early January, indicating on its official website an option for immediately implementing the tax credit.
Tesla has been contending that the federal tax credits should not serve as a limiting factor in electric vehicle adoption. With the Tesla Model 3 LR AWD certification for full incentives, that mission is achieved for one of the brand’s top-selling offerings.
